Spider
07-19-2008, 09:13 AM
By JOAN BARRON
Star-Tribune capital bureau
Sunday, July 6, 2008 2:06 AM MDT
CHEYENNE -- Repeal of an old law that prohibits sales below cost could reduce gasoline prices, two Natrona County legislators say.
Sen. Charles Scott and Rep. Tim Stubson, R-Casper, plan to try again to repeal the archaic law, which they say gasoline dealers are using to prevent competitors from discounting gasoline prices.
The law was adopted in the 1930s and is designed to fight deflation by keeping prices up, Scott said.
A lobbyist for the Wyoming Petroleum Marketers Association, however, said repeal of the law would hurt small businesses.
Scott said he and Stubson didn't think anybody was using the law, “because we know the attorney general was unwilling to enforce it.”
"But it turns out what happens in the petroleum area when someone discounts gas too vigorously, they get an attorney to write a letter threatening legal action,” he said in a telephone interview.
Scott became interested in repeal of the old law when a citizen complained last summer that about a quarter or one-third of Wal-Mart's generic prescription drugs aren't available at the $4 price because of this old state law.
A Wal-Mart representative said the company is too big to ignore a state law, Scott said.
Scott and Stubson were unaware of opposition to the repeal proposal last winter until a meeting of the Minerals, Business and Economic Development Committee.
"The Wyoming Petroleum Marketers Association showed up with a lobbyist out of Colorado and a telephone campaign and got the bill killed,” Scott said.
Scott didn't blame the committee, as he didn't foresee the opposition to the bill in the short budget session.
Having figured out the petroleum angle, he and Stubson want to try again.
"I thought this was a good time to talk to people about it to get support to get it repealed,” Scott said.
Although Wyoming gas prices are lower than the national average, they are not as low as they should be, he said.
"I think this law is the reason,” Scott said.
Mark Larson, a lobbyist for the Wyoming Petroleum Marketers Association, said that repealing the law has broad and dire implications for small businesses.
"We have a problem with predatory pricing sufficient that if you eliminate that bill, the message is you want to make it the state of Wal-Mart, instead of the state of Wyoming,” Larson said in a telephone interview.
Larson claims Wal-Mart has a nationwide plan to eliminate all state low-cost-selling laws.
He said he is not suggesting that Scott is involved in that plan.
When the law passed in the 1930s, he said, refineries all owned their own gas stations. They were not only producing the crude oil, but pushing it to their own stations and selling it for less than their competitors.
"That's no longer the case,” he said.
"Right now the petroleum marketers, the guys that are selling gas on the street, have the worst margins since 1974 with demand down and cars getting more miles per gallon,” Larson said.
The only people making money on gasoline today, he said, are the developers and the speculators in the commodities market.
When Colorado repealed its low-cost-selling law, there was no big reduction in gas prices, but there was a jump in the cost of food, he said.
Larson acknowledged that the local attorneys in Powell have used the state law to put pressure on out-of-state marketers who tried to come in and buy the market by selling below cost.
"While it hasn't been prosecuted, it definitely has been a leverage,” he said.
Contact Joan Barron at joan.barron@trib.com or by phone at 307-632-1244.
Star-Tribune capital bureau
Sunday, July 6, 2008 2:06 AM MDT
CHEYENNE -- Repeal of an old law that prohibits sales below cost could reduce gasoline prices, two Natrona County legislators say.
Sen. Charles Scott and Rep. Tim Stubson, R-Casper, plan to try again to repeal the archaic law, which they say gasoline dealers are using to prevent competitors from discounting gasoline prices.
The law was adopted in the 1930s and is designed to fight deflation by keeping prices up, Scott said.
A lobbyist for the Wyoming Petroleum Marketers Association, however, said repeal of the law would hurt small businesses.
Scott said he and Stubson didn't think anybody was using the law, “because we know the attorney general was unwilling to enforce it.”
"But it turns out what happens in the petroleum area when someone discounts gas too vigorously, they get an attorney to write a letter threatening legal action,” he said in a telephone interview.
Scott became interested in repeal of the old law when a citizen complained last summer that about a quarter or one-third of Wal-Mart's generic prescription drugs aren't available at the $4 price because of this old state law.
A Wal-Mart representative said the company is too big to ignore a state law, Scott said.
Scott and Stubson were unaware of opposition to the repeal proposal last winter until a meeting of the Minerals, Business and Economic Development Committee.
"The Wyoming Petroleum Marketers Association showed up with a lobbyist out of Colorado and a telephone campaign and got the bill killed,” Scott said.
Scott didn't blame the committee, as he didn't foresee the opposition to the bill in the short budget session.
Having figured out the petroleum angle, he and Stubson want to try again.
"I thought this was a good time to talk to people about it to get support to get it repealed,” Scott said.
Although Wyoming gas prices are lower than the national average, they are not as low as they should be, he said.
"I think this law is the reason,” Scott said.
Mark Larson, a lobbyist for the Wyoming Petroleum Marketers Association, said that repealing the law has broad and dire implications for small businesses.
"We have a problem with predatory pricing sufficient that if you eliminate that bill, the message is you want to make it the state of Wal-Mart, instead of the state of Wyoming,” Larson said in a telephone interview.
Larson claims Wal-Mart has a nationwide plan to eliminate all state low-cost-selling laws.
He said he is not suggesting that Scott is involved in that plan.
When the law passed in the 1930s, he said, refineries all owned their own gas stations. They were not only producing the crude oil, but pushing it to their own stations and selling it for less than their competitors.
"That's no longer the case,” he said.
"Right now the petroleum marketers, the guys that are selling gas on the street, have the worst margins since 1974 with demand down and cars getting more miles per gallon,” Larson said.
The only people making money on gasoline today, he said, are the developers and the speculators in the commodities market.
When Colorado repealed its low-cost-selling law, there was no big reduction in gas prices, but there was a jump in the cost of food, he said.
Larson acknowledged that the local attorneys in Powell have used the state law to put pressure on out-of-state marketers who tried to come in and buy the market by selling below cost.
"While it hasn't been prosecuted, it definitely has been a leverage,” he said.
Contact Joan Barron at joan.barron@trib.com or by phone at 307-632-1244.